Show why the goods cannot be giffen with these preferences

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Reference no: EM133300669

Problem Statement: Good Types and Calculus. Consider the general Cobb-Douglas utility function: ??(??1, ??2) = ??????1-??, ?? ∈ (0, 1).

Question 1: Show why the goods cannot be Giffen with these preferences.

Question 2: Show that with these preferences, the goods must be normal goods.

Question 3: Referring to normal goods, what sign does the total effect (TE) have? Explain why.

Reference no: EM133300669

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